Chemical executives cite fiscal cliff, economy as biggest concerns

The new KPMG poll finds 41% of US chemical business executives believe in the current macro-economic environment, the top concern is the ongoing fiscal cliff crisis.

Keywords:

Chemical industry
executives say the US fiscal cliff crisis and general
economic uncertainty are driving increased focus on operational
excellence and a strong balance sheet, according to the results
of a new poll released Wednesday by US audit, tax and
advisory services firm KPMG.

But despite the economic challenges, executives say the
chemicals industry will continue to see strong growth in the US
as a result of shale gas developments.

According to the KPMG poll, 41% of industry business leaders
indicate that in the current macro-economic environment, their biggest concern
is the US fiscal cliff.

An additional 20% point to a slowdown in emerging markets,
while 19% cited Eurozone debt issues.

"The threat of the fiscal cliff isan obvious concern,
leading many companies to focus on improving business
effectiveness and maintaining a strong balance sheet," said
Mike Shannon, global chairman of KPMG's chemicals and
performance technologies practice.

"Companies that are successful in these endeavors can gain a
competitiv eadvantageand be better positioned to capitalize if
the economic tide turns," he added.

According to nearly one-third of executives surveyed, shale
gas developments in the US will drive significant growth in petrochemical and downstream
manufacturing.

Additionally, 37% say US shale exports will force increased
competition, leading to price and margin erosion in Asia.

"To support planned investments in capacity, companies must
invest in broadening their supply chain capabilities to ensure
that exports get to the high growth markets. These markets will
be critical to the growth of the sector, especially in the US
where exports of product derived from shale gas are expected to
become a critical growth platform."

According to the poll, however, 28% of chemical
industry business leaders say their companies do not currently
have an emerging markets growth strategy in place.

"This response is startling because we see emerging markets
as a critical growth factor for any large chemical company over
the next decade, especially as demand in those regions will
only increase," Harnick said.

The results reflect responses from 87 senior industry
executives around the world who participated in a recent KPMG
webcast poll.

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